Transit‑State GST Officers Cannot Detain Inter‑State Goods: AP High Court’s Golden Traders Ruling and Practical Defence Strategy for Taxpayers
This title signals both the doctrinal core (jurisdiction of transit‑State officers) and the practical angle (defence strategy).
Andhra Pradesh High Court in Golden Traders has clearly held that a transit‑State GST officer cannot detain or confiscate goods in a “pure” inter‑State movement where neither supplier nor recipient is in that State, even if undervaluation or document mismatch is alleged. This ruling gives a strong, jurisdiction‑based defence for taxpayers and practitioners whenever vehicles are stopped in intermediary States and subjected to sections 129/130
Everyday problem: detention in transit States
In practice, many of us see the same pattern: goods are moving from State A to State B under IGST, with proper invoices and e‑way bills, but the vehicle is intercepted in State C only because it passes through that State. Officers in State C often:
Allegedly “re‑value” the goods on the spot.
Treat minor mismatch in quantity/description as evasion.
Invoke section 129 to detain goods and conveyance.
Threaten confiscation under section 130 unless tax and penalty are paid.
This creates a “checkpoint tax” culture, blocking working capital and disturbing logistics, though the transit State has no tax stake in the transaction.
Golden Traders breaks this pattern by putting jurisdiction back at the centre of enforcement.
Golden Traders: facts and core dispute
In Golden Traders & Ors. v. Deputy Assistant Commissioner of State Tax & Ors., a batch of writ petitions challenged detentions by Andhra Pradesh State GST officers.
Key factual features:
Goods were moving under valid tax invoices and e‑way bills.
Supplies were inter‑State, liable to IGST, with both origin and destination States outside Andhra Pradesh (e.g., Kerala to Delhi, Karnataka to other States).
Andhra Pradesh was only a transit State in the route.
AP officers intercepted vehicles, alleged undervaluation/quantity mismatch, and initiated section 129/130 proceedings.
Taxpayers challenged these actions as without jurisdiction, arguing that AP had no IGST share in such transactions.
The Division Bench examined:
Cross‑empowerment provisions under CGST/APGST and IGST Acts.
IGST apportionment scheme.
Constitutional framework under Articles 246A and 269A.
Core holdings in practitioner’s language
Transit State has no tax stake, hence no 129/130 power
The Court starts from the constitutional design: inter‑State supplies fall under Parliament’s special power under Article 246A (2), and GST on such supplies is levied and collected as IGST under Article 269A, to be apportioned between the Union and the destination (and, where relevant, origin) States as per section 17 of the IGST Act.taxo+1
On this basis, the Bench reasons:
A transit State through which goods merely pass is not a beneficiary of IGST apportionment on that supply.
If AP, as a transit State, levies tax, penalty or fine through section 129/130 on a Kerala–Delhi supply, it would effectively appropriate revenue which constitutionally belongs to other States, with no statutory mechanism to regularise such appropriation.
Accordingly, the Court holds that:
A State which is neither the supplier’s State nor the place of supply, and which has no IGST share in the given transaction, cannot invoke sections 129/130 against such consignments merely because the vehicle is physically present in that State.
Physical passage through the territory does not confer tax‑enforcement jurisdiction in the absence of tax nexus.
For us, this is the first and most important line of defence: no tax nexus → no 129/130 in transit State.
Only a “proper officer” with jurisdiction can use sections 129 and 130
The Court then focuses on the definition and role of “proper officer”.
Key points:
Section 6 of CGST/APGST and section 4 of IGST provide for cross‑empowerment, but subject to allocation of taxpayers between Centre and States as recommended by the GST Council.
An APGST officer becomes “proper officer” for CGST/IGST only in respect of taxpayers administratively assigned to Andhra Pradesh.
A Kerala supplier and Delhi recipient, in a Kerala–Delhi IGST supply, are not assigned to AP; hence AP officers are not proper officers for that transaction.
Therefore:
A State GST officer in a transit State cannot claim a general, roaming commission jurisdiction merely because he is “a GST officer”.
Sections 129/130 can be used only by a proper officer who has jurisdiction over the taxable person or transaction—i.e., a State that actually has a share in IGST or in CGST/SGST.
In simple terms: no allocation, no “proper officer”, no 129/130.
Valuation disputes are not valid grounds for detention/confiscation
On the factual ground of detention— “undervaluation” and quantity discrepancies—the Bench aligns itself with an existing line of High Court precedents.
It notes and endorses earlier rulings:
K.P. Sugandh Ltd v. State of Chhattisgarh: goods cannot be seized merely for alleged wrong valuation; such issues must go to the assessing officer.
Kerala and other High Courts have held similarly for valuation/ classification disputes and minor document errors, emphasising that section 129 is not a substitute for assessment.
Golden Traders applies this to say:
Valuation issues, price differences and minor mismatches are not grounds to detain or confiscate goods under sections 129/130 in transit.
These are matters for regular assessment by the jurisdictional assessing officer with full procedure, not for roadside adjudication by a mobile squad.
For practitioners, this reinforces a second line of defence: even if the officer had jurisdiction (which transit‑State officers do not), valuation disputes alone do not justify 129/130.
Transit State’s limited role: “record and forward”
Significantly, the Court does not say transit States must turn a blind eye. Instead, it recognises a narrow but legitimate role:
A transit‑State officer may intercept and inspect.
If he notices discrepancies—including possible undervaluation—he may:
Record the discrepancy.
Forward the material to the jurisdictional officers of the consignor and consignee.
However, he must:
Permit the vehicle to continue its journey.
Refrain from detaining, seizing or confiscating under sections 129/130 in his own State.
This “record and forward” doctrine balances enforcement with free movement, and avoids unjust enrichment of transit States.
Constitutional and IGST framework behind the ruling
Articles 246A and 269A: who controls inter‑State GST?
Article 246A (1) gives Parliament and State Legislatures concurrent power to make GST laws, but Article 246A (2) reserves to Parliament exclusive power to legislate on GST in the course of inter‑State trade or commerce. Article 269A provides that GST on inter‑State supplies shall be levied and collected by the Government of India, and apportioned between Union and States as Parliament provides.
Golden Traders relies on this structure to conclude:
For inter‑State supplies, enforcement authority flows from this Union‑centric, apportionment‑based scheme.
A transit State, which is not part of the apportionment chain for that supply, cannot super‑impose its own enforcement actions that effectively amount to taxing that supply.
IGST apportionment (section 17) and transit States
Section 17 of the IGST Act lays down how IGST is split between Union and States, and at no point is a transit State recognised as beneficiary merely by virtue of physical passage of goods.
The Court notes that:
Allowing a transit State to extract tax, penalty or redemption fine using sections 129/130 would amount to that State keeping money constitutionally allocated to origin and destination States.
There is no statutory machinery to reconcile or transfer such collections; therefore, such enforcement is, in substance, unconstitutional extra‑territorial taxation under the guise of detention.
Article 301 and free movement of trade
Though not always expressly discussed, the logic of Golden Traders is consistent with Article 301’s guarantee of freedom of trade, commerce and intercourse throughout India.
Routine detention of duly documented IGST consignments in transit States, on mere suspicion of undervaluation, creates a de facto barrier to free trade.
By re‑anchoring enforcement in tax nexus and apportionment, the Court indirectly furthers Article 301’s purpose by dismantling unjustified check‑post barriers.
Other important rulings on detention in transit
Golden Traders should be read alongside older High Court jurisprudence that already restricted section 129/130:
Kerala High Court decisions (e.g. considered in professional summaries by tax authors) holding that minor e‑way bill errors or valuation differences, without clear intent to evade, do not justify detention/confiscation.
Madras High Court decisions (such as those discussed in GST case‑law digests) insisting that classification/valuation disputes belong to assessment, not to the detention stage.
Cases like K.P. Sugandh and Hindustan Coca Cola emphasising that squad officers may intercept and document, but their role is to transmit material to jurisdictional officers, not to conduct full‑blown adjudication on the roadside.
Golden Traders adds a jurisdictional layer:
Even if there is a serious issue and even if section 129 is otherwise attracted, a transit‑State officer cannot escalate under 129/130 for a transaction where his State has no IGST share.
Practically, taxpayers now have two independent lines of challenge:
Lack of jurisdiction (transit State; no tax nexus; not a proper officer).
Misuse of 129/130 for valuation/minor discrepancies.
Practical strategies for taxpayers and professionals
Structuring inter‑State movements
For clients, documentation is still the first line of defence:
Ensure invoices clearly show inter‑State supply nature and correct GSTINs of supplier and recipient.
E‑way bills must show origin and destination States accurately; where possible, ensure transporter documentation reflects the intended route (e.g., “via Andhra Pradesh”).
Maintain valuation workings, pricing policies and comparative market data at the office so that jurisdictional officers can be satisfied later if they receive information from transit States.
This makes it easy to demonstrate that the intercepting State is only a transit State.
When goods are detained in a transit State
If a client’s vehicle is detained in a State that is clearly only a transit State:
Verify the nature of supply
Confirm that both supplier and recipient are outside that State and that IGST applies.
Check that documents (invoice, e‑way bill) are in order.
File a written representation on jurisdiction
Assert that the officer is not a proper officer for the transaction.
Cite Golden Traders and emphasise that transit‑State officers cannot invoke sections 129/130 where their State has no IGST apportionment.
Clarify that even assuming discrepancies, the officer’s role is limited to recording and forwarding information.
Press for immediate release
Request release of goods and vehicle without insisting on tax/penalty, relying on the Golden Traders reasoning read with earlier High Court rulings on misuse of section 129.
If release is still refused
Consider a writ petition highlighting:
Lack of jurisdiction (transit State; no tax nexus).
Misuse of sections 129/130 for valuation disputes.
Violation of proportionality and free trade.
In urgent cases, payment under protest may be considered, with clear recording of objections and reservation of refund rights.
Advisory points for clients and drivers
Professionals should communicate to manufacturers, traders and logistics operators:
Detention risk in transit States for “pure” inter‑State consignments (neither origin nor destination in that State) is substantially reduced post Golden Traders, as such officers lack jurisdiction to invoke 129/130.
However, proper documentation remains non‑negotiable; absence of valid e‑way bill, fictitious parties or sham transactions still invite action by jurisdictional officers.
Drivers should be trained to:
Carry all mandated documents.
Remain calm at checkpoints, avoid arguments, and ask for written reasons for detention.
Inform the tax advisor immediately so that a legally grounded representation can be submitted.
Illustrative example for Karnataka–Telangana consignments via AP
Consider a Karnataka supplier sending goods to a Telangana customer; the natural route passes through Andhra Pradesh.
AP officers intercept and allege undervaluation, initiating 129/130.
Post Golden Traders:
AP is only a transit State and has no IGST share in the supply.
AP officers are not proper officers for that transaction.
They cannot lawfully detain or confiscate goods under sections 129/130.
At most, they may note their suspicions and forward them to Karnataka or Telangana authorities while letting the vehicle proceed.
This gives you a clear, court‑backed argument to deploy both in representations and writs.
Model representation to transit‑State officer (ready to use)
This is a practical, cut‑and‑use draft for taxpayers/transporters, to be tailored to specific facts.
To
The Proper Officer
[Designation]
State GST Department, [Transit State]
Subject: Objection to Detention of Goods – Lack of Jurisdiction under Sections 129/130
Respected Sir,
We refer to the detention of goods and vehicle bearing No. [Vehicle No.] on [Date] at [Location].
Nature of supply and movement
(a) The goods are being transported in the course of inter‑State supply from [Origin State – Supplier Name & GSTIN] to [Destination State – Recipient Name & GSTIN].
(b) The movement is supported by valid tax invoice No. [Invoice No.] dated [Date] and a valid e‑way bill No. [E‑Way Bill No.], copies of which are annexed.
(c) The State of [Transit State] is neither the originating State nor the destination State; it is only a transit State through which the vehicle is passing as a matter of route and logistics.
Lack of jurisdiction of transit‑State officer
(a) In terms of the constitutional scheme under Articles 246A and 269A and the IGST apportionment mechanism, GST on inter‑State supplies is levied as IGST and apportioned between the Union and the originating/destination States only.
(b) The State of [Transit State] has no tax stake or apportionment in respect of the present inter‑State supply. Accordingly, officers of this State are not “proper officers” for this transaction under the IGST/CGST/SGST Acts.
(c) The Hon’ble Andhra Pradesh High Court, in Golden Traders & Ors. v. Deputy Assistant Commissioner of State Tax (W.P. No. 541 of 2026 & batch, judgment dated 01.04.2026), has categorically held that GST officers of a transit State cannot detain, seize or confiscate goods in a “pure” inter‑State movement where neither supplier nor recipient is located in that State, even if alleged undervaluation or document mismatch is noticed. The Court has clarified that such officers lack jurisdiction to invoke sections 129/130 in respect of such consignments and may only record discrepancies and forward them to the jurisdictional officers of the supplier/recipient.
Valuation/document issues are not grounds for detention
(a) Without prejudice and assuming, for the sake of argument, that any discrepancy is perceived in valuation, description or quantity, it is respectfully submitted that such issues are matters for regular assessment by the jurisdictional assessing officer.
(b) Various High Courts, including in K.P. Sugandh Ltd v. State of Chhattisgarh and other rulings, have held that valuation disputes or minor document mismatches do not justify detention/confiscation under sections 129/130, in the absence of clear intent to evade tax.
(c) Detention in the present case solely on the basis of alleged undervaluation or document mismatch is, therefore, contrary to law and beyond the scope of sections 129/130, even otherwise.
Transit‑State officer’s limited role – record and forward
In view of the above legal position, it is respectfully submitted that if your office still entertains any doubt or suspicion, the proper and lawful course is:
(i) To record the alleged discrepancies in a brief note; and
(ii) To forward the same, along with copies of documents, to the jurisdictional GST officers of the supplier and recipient for examination in assessment,
without detaining the goods or vehicle or insisting on payment of tax/penalty under sections 129/130 in [Transit State].
Request for immediate release
In these circumstances, we request that the proceedings initiated under section 129/130 be dropped forthwith and that the goods and vehicle be released immediately without insisting on payment of any tax, penalty or fine, in line with the principles laid down by the Hon’ble Andhra Pradesh High Court in Golden Traders (supra).
We reserve all our rights and remedies, including the right to approach the Hon’ble High Court, in case of continued detention or coercive action.
Yours faithfully,
[Name]
[Designation]
[Name of Taxpayer/Transporter]
[GSTIN]
[Date and Place]
This template can be customised with case‑specific facts and supplemented with annexures (copies of invoices, e‑way bills, vehicle RC, etc.) for immediate use.
Closing perspective for practice
Golden Traders is not a mere procedural decision; it is a structural correction that realigns GST enforcement with constitutional and statutory design. It re‑affirms three key principles:
Jurisdiction follows tax nexus and IGST apportionment, not physical interception.
Sections 129/130 are jurisdiction‑specific tools, not universal powers in the hands of any officer.
Valuation and minor discrepancies belong in assessment, not at the roadside.
For tax professionals, this ruling is now a central authority to:
Resist unlawful detentions in transit States.
Structure representations and writ petitions around jurisdiction, not just merits.
Reassure clients that genuine inter‑State trade, supported by proper documentation, cannot be held hostage by transit‑State officers.
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